When the West Virginia Business and Industry Council's Chris Hamilton claims that the False Claims Act (HB 4001) would have been a "bonanza for plaintiffs' attorneys," he's either misleading state voters or admitting that numerous corporations are committing fraud.
The False Claims Act was not a West Virginia Association for Justice bill. We were not involved with drafting the legislation. We did not lobby for it - but we now feel compelled to respond to his claims.
HB 4001 would have helped the state recover millions in tax dollars stolen through fraud. West Virginia has limited resources and is overmatched in this fight. Under the proposed bill, those who knowingly submitted false claims to state government would have been liable for three times the government's damages plus penalties.
Its whistleblower provision would have allowed citizens with evidence of fraud to sue on behalf of the government. The whistleblowers would report the fraud to private attorneys, who would then use their time and money to build the case for the state. Once filed, the Attorney General would review it and determine whether to join the private claim. This would have helped the state uncover fraud and increase its ability to recover monies taken, all at minimal cost to taxpayers.
It works. A fiscal note on North Carolina's bill estimated it would recover more than $3 million annually. A recent federal claim against JPMorgan Chase over bad loans led the U. S. government to recoup more than $500 million. It is estimated that it has saved billions in federal tax dollars. Why would West Virginia not want to do the same?
The only way this legislation is a "bonanza" for attorneys is if hundreds of businesses were defrauding the state and cheating taxpayers. Unless a corporation commits fraud, there is no case. In light of Hamilton's response, I believe the questions we need to ask are just how many corporations are defrauding the state of West Virginia and why did legislators vote to allow it to continue unchecked?
EDITOR'S NOTE: Bernie Layne is President of the West Virginia Association for Justice.